Disembedding the Swedish Model?

Abstract This chapter examines the trajectory of Sweden’s early twenty-first century welfare state as a case of policy drift, which led to a move away from social investment as well as Sweden’s long-standing status as a social investment vanguard. Historically characterized by an egalitarian ethos and high employment levels, Sweden’s welfare state has undergone a ‘triple disembedding’ of its buffer, flow, and stock functions. These shifts reflect heightened political competition, the decline of Social Democratic hegemony, and a diminished reliance on inclusive political and professional deliberations in policy-making. The chapter analyzes key reforms in unemployment benefits, sick leave insurance, and active ageing policies. It highlights the role of partisan polarization, with centre-right governments pursuing cost containment and work-first strategies, which differed in many ways from the centre-left’s focus on education and social safety nets, though the centre-left sometimes sustained the cutbacks of the centre-right when returning to government. Commissions of Inquiry, once a hallmark of Sweden’s consensus-driven policy-making, have been increasingly sidelined. Politically driven privatization in education and care services and policy drift—such as the erosion of benefit adequacy due to inflation—have further weakened Sweden’s welfare performance in terms of rising inequality and poverty, particularly among marginalized groups. Sweden continues to score high on many welfare indicators and remains an employment champion, yet long-term policy drift has undermined commitments to universalism and decommodification.